Econ 340 Test 3 Name _ ASSUME linear production possibility curves Using all resources Luxembourg can make either 2000 batteries or 2000 tires or any linear mix in between. Using all resources Germany can make either 1000 batteries or 3000 tires or any linear mix in between. 1. Who has an absolute advantage in battery production 2. Who has an absolute advantage in tire production What are the marginal rates of transformation prices for each country? 3. Luxembourg Tire per 1 Batteries 4. Germany: Tire per 1 Batteries 5. Who has a comparative advantage in battery production? 6. Who has a comparative advantage in tire production? 7. What is a price that trade might occur, but all the gains would go to Luxembourg 8. In autarky if Lux. Must have 1000 batteries how many tires can they have? 9. Inautarky if Germ. Must have 1000 batteries how many tires can they have? If both countries still must have 1000 batteries, with Specialization and trade at a price of 2 tires per battery: 10. How many tires can Germany have? 11. How many tires can Lux. have? 12. Today vs 50 years ago there has been an increase in the amount of world trade that is in a. Finished manufactured goods . Intermediate goods b. Raw Agricultural products d. Volley Balls 13. What is the most globalized of the following? a. Llabor d. Intermediate goods b. Finished goods e. Financial Capital c. Raw Materials 14. A country with Comparative advantage a. Can produce a product with fewer inputs than another b. Can produce a product faster than another . Can produce a product with relatively fewer inputs than another d. Can produce a higher quality product